Civil Rights Groups Renew Call for Immediate Moratorium On All Home Foreclosures

Minorities are bearing the brunt of foreclosures, according to the Center for Responsible Lending

A Washington, D.C., reporter for more than 30 years, Jim Limbach covers the federal agencies for ConsumerAffairs. Previously, he was a reporter and news anchor for Associated Press Broadcast Services, where he covered business and consumer news as well as space shots and other major spot news events.
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National civil rights groups are renewing their April 2007 call to institute an immediate national moratorium on foreclosures.

The groups, including the Leadership Conference on Civil and Human
Rights, the National Fair Housing Alliance, National Council of La Raza,
the NAACP and the Center for Responsible Lending say that until lenders
in all 50 states demonstrate that they are adhering to all existing
laws, regulations, and contractual guidelines related to loss mitigation
and foreclosure legal process, they should not move forward with any
foreclosures.

"If we don't take drastic measures now," says Wade Henderson,
President & CEO of the Leadership Conference on Civil Rights, "we
can expect millions of additional foreclosures in the coming years, with
a disproportionate number of them involving Latino and African-American
families."

Nationwide action

Lenders across the country are announcing temporary foreclosure
moratoria and attorneys general are calling for the same because of
systemic illegal foreclosure filings and misrepresentations.

Among the latest is Illinois Attorney General Lisa Madigan, who is
demanding 23 additional loan servicers provide her office with
information concerning the fairness and accuracy of their foreclosure
procedures in courts across the state.

Madigan recently issued a similar demand to GMAC/Ally, Bank of
America and JP Morgan Chase to halt all pending foreclosures in
Illinois, including post-foreclosure sales and evictions, after
they admitted they were filing false documents in foreclosure
proceedings.

"The same mortgage giants and big banks that fraudulently put people
into unfair loans are now fraudulently throwing people out of their
homes," Madigan said. "They should not be above the law."

Madigan also announced she is helping convene a multistate task force
of state attorneys general and bank regulators to coordinate states'
reviews of servicers' foreclosure processes.

Uneven impact

Research demonstrates that just as minority communities were more
likely to receive predatory subprime loans, they also suffer more from
foreclosures. "Our research reveals that African-Americans and Latinos
are almost 75 percent more likely to experience foreclosure than Whites,
said Michael Calhoun, President of the Center for Responsible Lending.

"We cannot allow this injustice to continue," he added. "Mortgage
servicers and lenders must work to preserve homeownership when possible;
when not possible, they must follow the law when foreclosing."
Moreover, the higher the concentration of racial minorities in a
community, the higher the rates of foreclosure.

And it isn't just individual homeowners who are affected.
Neighborhoods across America are being destroyed as each foreclosure has
enormous spillover effects. Communities -- especially minority
communities -- are seeing their home vacancy and crime rates increase
while home values and tax bases are eroded.

Moratorim necessary

Because many lenders are not equipped to handle the current volume of
home defaults, it's believed a foreclosure moratorium will give them a
chance to develop adequate systems and capacity to preserve
homeownership.

The groups are calling on Congress to investigate the widespread
fraud and misrepresentation in foreclosure filings, and to revive
legislation that would allow loan modifications in bankruptcy court
proceedings.

The organizations say all lenders should be required to evaluate
homeowners for loan modifications and other solutions, with strong
transparency and accountability. Lenders who participate in the
government's foreclosure prevention program (HAMP) or handle
government-insured loans are already required to do so. Homeowners must
also have recourse when their lenders deny loan modifications leading
to unnecessary foreclosures.

Janet MurguÃ­a, President and CEO of the National Council of La Raza,
says Latino and black families have been deeply harmed by the economic
meltdown through the loss of homes, jobs, and entire neighborhoods.

"Our communities were targeted by predatory lenders As a result,
more than 1.3 million Latino families will lose their homes to
foreclosure by the end of the crisis. Foreclosure prevention programs
are not working, foreclosure rescue scams are rampant in our
communities, and now fraudulent documentation is leading to a new wave
of foreclosures," she said. "Enough is enough."

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